Indian Rupee Hits 5-week High

The Indian rupee strengthened to around 94.7 per dollar, extending its recovery to a five-week high as easing geopolitical tensions in the Middle East improved investor sentiment and reduced pressure from elevated energy prices. The announcement of a US-Iran peace agreement and the reopening of the Strait of Hormuz triggered a sharp decline in crude oil prices. Market participants expect further gains for the rupee if oil prices remain stable. Last week, the currency faced pressure from strong dollar demand by importers, especially oil companies. However, optimism over a potential Middle East peace agreement and RBI measures to encourage foreign currency inflows helped cushion losses and support the rupee. Attention is now focused on the US Federal Reserve's policy announcement. While rates are expected to remain unchanged, investors will watch Chair Kevin Warsh's comments and updated projections for clues on the future direction of monetary policy.

The Indian Rupee touched 94.46 against the USD, the highest since May 2026. Over the past 4 weeks, US Dollar Indian Rupee lost 1.85%, and in the last 12 months, it increased 9.88%.

The Indian rupee strengthened to around 95.2 per dollar, recovering from previous-session losses as lower crude oil prices improved sentiment. The rebound followed a sharp decline in global oil markets amid optimism over a potential US-Iran diplomatic breakthrough. Brent crude fell to $88.80 per barrel, its lowest level in two months, after President Donald Trump suggested a peace agreement with Iran could be reached as early as the weekend. The improved outlook also lifted Asian equities, while US Treasury yields and the dollar weakened. Despite the positive mood, investors remain cautious, as earlier signs of progress in US-Iran talks failed to produce a final deal. The Reserve Bank of India has implemented measures to attract dollar inflows and support the currency, but the rupee's recent slide below pre-intervention levels highlights ongoing challenges. Analysts say lasting support for the rupee will require a sustained decline in oil prices.